Global Competition Heats Up

Even as individual companies are competing in a global economy against one other, the competition is also pitting country against country, region against region.

India complains of China's export tax rebates. China — its rebates now trimmed and wages rising — frets about Pakistan's low labor costs and India's government development programs for the textiles industry. Pakistan, off limits to many potential buyers because of safety concerns, worries about remaining competitive when too few customers are willing to visit its plants. Brazil, its U.S. business severely crimped by its currency valuation, looks to Europe and its domestic markets for growth. So does Turkey, buffeted by price competition from China. Finally, visa restrictions remain a barrier for many off-shore companies interested in putting their people on the ground on the U.S. market.

In one sense, the global industry could be said to be in its infancy. The combined $376.3 million in sheet volume posted by the seven leading global sheet manufacturers is less than half the $690 million in volume Springs recorded last year. The figure is well below the $1.47 billion the top five U.S. sheet suppliers rang up — although it's likely the top global players are also key vendors to the U.S. suppliers.

The race is tightening in bath towels as the United States sheds domestic production. The Global Top 5 expect this year's volume to hit $285.4 million collectively. For comparison's sake, WestPoint Home last year did $400 million and Springs $270 million in bath towels. Again, in many cases the top global manufacturers are suppliers to the U.S. leaders — or competitors, or both.

Over the past year, leading suppliers have begun striving to expand buyers' perceptions of what their core competencies might be. Towel manufacturers have begun treading into the sheet business. Sheet manufacturers have tacked on cut-and-saw to put themselves into the bed ensemble business — as have fabric manufacturers. Bedding ensemble plants have jumped into the curtain and decorative pillow categories.

Some of the more aggressively off-shore manufacturers have set ambitious targets. Al-Abid Silk Mills wants to hit $150 million in total sales next year. Westgate — formerly ADF/HFI — passed the $100 million mark in 2005 and aims for about $1 billion over the coming years. Welspun recently boosted its worldwide sales by roughly $65 million with the acquisition of U.K. towel stalwart Christy, and is shopping for more companies to springboard it beyond towels.

Research for this report was compiled by HTT staff.

In cases where companies did not provide firm numbers, estimates were used.

GLOBAL SUPPLIERS BATH TOWELS
($millions)

Company Name, HQ

2006 export to U.S.

Source: HTT research

1. Welspun Mumbai, India

$91

Welspun has been aggressively expanding its organic towel business and emphasizing its growing bedding business.

2. Abhishek Inds. (Trident) Mumbai, India

89

Trident remains a powerhouse in the terry towel business and a favorite at retailers such as Wal-Mart.

3. Karsten Blumeneau, Brazil

50

Although exports to the United States have been hampered by Brazil's currency woes, Karsten continues to expand its worldwide presence, not only in exports but in production.

4. Loftex Binzhou, China

35

Still a relatively new player in the United States, the company is finding its largest opportunities by hammering away at innovation and differentiation.

5. Sunvim Qingdao, China

20.4

Despite the re-imposition of quota on towel exports to the United States, the manufacturer owns sufficient quota to continue growing its business.

GLOBAL SUPPLIERS SHEETS
($millions)

Company Name, HQ

2006 export to U.S.

Source: HTT research

1. Alok Industries Mumbai, India

$91.3

Coming off a year that brought 15% gains in exports, Alok is seeking to capitalize on a still-churning economic and political environment and, like other companies, find strategic partners in the United States. The company is also eying new products, such as an entry into bath towels next year.

2. Zorlu Istanbul, Turkey

65

Zorlu sees gold in its still-developing bedding business, particularly on the higher end.

3. Nishat Mills Nishatabad-Faisalabad, Pakistan

49

Nishat has continued to emphasize partnerships and is expanding its home textiles capacity and U.S. presence.

4. Yantai North Yantai, Shandong, China

48

Yantai North is emphasizing value-added products such as organics, bamboo and products employing functional fiber technologies.

5. Bombay Dyeing Mumbai, India

40

Bombay Dyeing has been focusing on core businesses.

6. Al-Abid Silk Mills Karachi, Pakistan

33

Al-Abid is ambitiously forecasting its total export business to hit $150 million next year, off this year's $100 million.

7. Veken Jin Hua Ningbo, China

20

Veken is paying more attention to fabric development for its bed-in-bag and sheet products, and is shifting from an OEM strategy.

GLOBAL SUPPLIERS BED ENSEMBLES
($millions)

Company Name, HQ

2006 export to U.S.

Source: HTT research

1. Yunus Group Karachi, Pakistan

$89

This related group of at least three mills continues to capitalize on synergies to expand its business.

2. Westgate (formerly ADF-HFI) Shanghai, China

63

In addition to growing its core bedding ensemble business, the company is now launching into bath as it moves aggressively to become a one-stop shop.

3. Veken Jin Hua Ningbo, China

40

Veken is paying more attention to fabric development for its bed-in-bag and sheets, and is shifting from an OEM strategy. The company would like to take a stake in an American company and buy a European brand.

4. Al-Abid Silk Mills Karachi, Pakistan

27

Top of the bed remains a key focus for Al-Abid in its drive to expand its business, particularly in the United States.

5. China Home Shanghai, China

22

This company is expanding rapidly in multiple product areas. The United States currently represents about 80% of its export business.

6. Nishat Mills Nishatabad-Faisalabad, Pakistan

17

Nishat has introduced more high-fashion bedding and is expanding its presence in categories such as window and table linens.

GLOBAL SUPPLIERS TABLE LINENS
($millions)

Company Name, HQ

2006 export to U.S.

Source: HTT research

1. Hand Fab India Panipat, India

$22

Hand Fab remains true to its focused calling.

2. Nishat Nishatabad-Faisalabad, Pakistan

14

Nishat has continued to emphasize partnerships and is expanding its home textiles capacity and U.S. presence. Table linens is a growth area.

3. Al-Abid Karachi, Pakistan

10

The manufacturer is currently adding EDI capabilities to its facilities in Pakistan as part of its strategic growth plan.

GLOBAL SUPPLIERS WINDOW TREATMENTS
($millions)

Company Name, HQ

2006 export to U.S.

Source: HTT research

1. Kucukcalk Basra, Turkey

$37

This Turkish powerhouse continues to grow.

2. Al-Abid Karachi, Pakistan

30

Al-Abid is ambitiously forecasting its total export business to hit $150 million next year, off this year's $100 million. Also currently adding EDI capabilities to its facilities in Pakistan.

3. Nishat Mills Nishatabad-Faisalabad, Pakistan

20

The company has been quietly building up its window business.

4. Shaoxing Bolan Textiles Shaoxing, China

13

This is a small but growing mill in terms of volume and capacity.

5. Ulusoy Tekstil Instanbul, Turkey

10

The company is continuing to retool its marketing and export focus away from the United States.